With over 35 years of personal
trading experience and well over 15 years of helping other
investors through my Pitbull Investor stock trading systems, I
have found a common pattern that consistently delivers better
than 90% winning trades having the potential of 25% gains or
more within 2-3 months. Now that may not sound like much, but if
you can compound a 20% gain 6 times a year that amounts to 300%
per year, and that is just a fraction of what the options
returns can be. (we also have an options engine that
automatically shows you what specific options to buy for these
trades).
As a trading Mentor, I have taught my
students over the years that through the proper selection of
certain trading patterns we can reap these gains and know
beforehand what to expect, both in profit and time-in-trade from
every single investment we make. That is more than 99 percent of
professional traders out there know and I am including big
long-time successful traders and mutual fund managers as well
who have been my students in the past and currently participate
in my ongoing Mentoring Forum..
Click
here for details )They have
learned NEVER to enter a trade unless they know exactly how long
they should be in each trade and what profit level they should
expect to achieve. I am sure you have heard the old adage "Cut
your losses short and let your profits RUN". The reason that old
time traders say this is they have no idea how long to stay in a
trade because they have NO TARGET. Their exits are out of fear
of losing rather than achievement of their trade goals.
Over the years I lamented to my students that while the most
successful pattern for trading is the Measured Move, there has
never been a scanning program to mechanically find these trades. I have
been looking for the holy grail of artificial intelligence
programs, all of which promise, but don't deliver. Some of
these programs cost as much as $3000 plus monthly fees.
Finally it occurred to me that what I was really looking for was
a scanning engine that could find the SETUPS for the trades,
which are VERY specific. That I could build myself! Then with a potential list of a handful
of stocks instead of 8800 in the entire equity market, I could
then watch those culled out of the pool like a hawk and pounce
on them when they broke out.
This must all be
confusing without pictures, so let me give you an example of
what I am talking about:
The basic elements are a Lead-In, a period of consolidation and a
breakout. This is the setup. The key to these patterns is
that once we identify those elements, we can project a line at
the same angle and length as the original lead-in to predict the
optimum target and maximum anticipated time to reach that
target. The pattern is uncanny in its accuracy and most of the
time stocks will reach their intended target ahead of time.
The lead-ins are easy to spot visually, but the
consolidations can take many forms. The most common are
annotated above. 1. A drooping flag channel, 2. A flat "BoxTop"
channel (strongest), 3. the Symmetrical Triangle, and 4. the
Pennant.
The reason these patterns are successful is the
original lead-ins are based on profitable earnings. The
retracement/consolidation period is a "pause to refresh" as
folks who made the right trade during the long rise now begin
to take profits, while others, anticipating further gains try
to get in a better prices. IF the stock still has good "bones"
(continued good news and earnings), then it would be natural
for it to continue on its growth path at the same angle and
speed as it had before the resting period. If the
earnings/growth picture has failed, then there will not be a
breakout and it will be eliminated as a buy candidate.
The lead-in must be at least 25% to insure a 20% gain from the
breakout zone. The hard part is identifying the breakout, as
these consolidations can be just about any shape. This is where
all of the previous attempts have fallen down. What I have done
is develop an nightly scan that identifies the following;
1. The precise date and price the stock begun a new lead-in
2. The date and price the lead-in "Qualifies", (reaches a
minimum of 25% growth)
3. The precise date and price of the lead-in High after the
stock begins to enter the consolidation phase.
4. The date and price that the stock is prime candidate for "Bullwatch"
status (buy imminent)
5. We track and list these stocks when they
get above their old highs of the previous trend and will
continue to follow them until either they have achieved new
qualified lead-in status or the trade fails.
Additionally, I will be looking at each of the Hotwatch stocks
as well as stocks in consolidation to alert you with my comments
when I see a change in status or a new buy signal. These
comments will be in the tabular output presented to you each
night. As stocks reach Hotwatch status I will also provide
a current marked up chart so you can see what I see. These will
be provided in a public charting area with a five day delay for
non-subscribers, but of course subscribers will get those charts
updated nightly.
I think this is the finest
trading system I have ever developed and am pleased to offer it
to you as part of our ongoing service commitment.
01/05/2012
